I know this has been done before but I've been struggling to find a way to do it on a Mac. Photoshop CS5 and earlier supported the PixelBender plugin but latest versions do not. It can be done with Gimp using the MathMap plugin but it's not available for the Mac. However, the author has created a stand-alone version of MathMap which is a bit tricky to use.
Droste_Image by Greg Smith, on Flickr
Droste_Image by Greg Smith, on Flickr
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